Panasonic plans major investment in Tesla’s battery plant

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Panasonic Corp. is set to invest billions of yen in Tesla’s battery plant that will research and produce lithium-ion batteries. Recently the Osaka-based firm had formed a separate company in the United States for Tesla’s gigafactory in Nevada.

Both Tesla and Panasonic have made a combined investment for the gigafactory. The electric car maker stated that the factory will ship 35GWh and 50 GWh of cells per year by 2020. In July, Tesla founder Elon Musk hoped that Panasonic would invest 30% to 40% of the factory’s total cost that would reach $5 billion.

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“Our initial amount in the factory will be tens of billions of yen,” said Kazuhiro Tsuga, Panasonic Chief executive at a trade show in Japan.

The new gigafactory will create about 6,500 jobs and will span across 10 million square feet. The company expects to produce more low-priced EV’s with a base price of $35,000 by producing cheaper battery packs. Panasonic’s new factory Panasonic Energy Corp. also based in Nevada at the gigafactory is for a strong supply communication and for correct supply of batteries.

Mr.Tsuga said he wanted to avoid a situation where Tesla wants to produce more cars but has limited battery production. He also said that he wanted the foreign exchange rates to remain stable as the dollar rising to ¥120 would be “excessive” while the dollar was trading at ¥109.12 in Asia. Nevada was chosen for the gigafactory site due to the attractive tax benefits up to $1.25 billion over a period of 20 years that includes sales tax abatement, tax credits, and discounted electricity rates.